APS, a leading challenger to the banks, offering alternative banking and payments solutions for consumers, SMEs and public sector organisations, is extending its credit facilities to support more small businesses with overdrafts and loans. Following an initial investment of £3.5 million into the credit fund from the company’s directors and board members, APS has partnered with Shawbrook, a challenger bank, to add a further £2.5 million to its lending capital. This fund will be used to support the growth ambitions of thousands of businesses, many of whom have been denied credit and even basic banking services, due to the perception that they are “high risk”.

As evidenced by recent growth in industrial output, the UK’s economy has started to revive. An important part of the business community, however, risks being locked out of this growth, as SMEs continue to be underserved by traditional banks. A recent report from Russell Griggs highlighted the sheer number of SME finance applications that were rejected over the last three years, with credit scoring often being given as the main reason. In addition, Funding for Lending figuresearlier this year showed that banks are not geared towards lending to SMEs, with a drop of more than £700 million in funds distributed in the first quarter of 2014.

Richard Wagner

APS has signed up over 25,000 SMEs, making it one of the UK’s leading providers of alternative banking services to the sector. Designed with the needs of small businesses in mind, the majority of overdrafts approved by APS can be credited instantly, ensuring businesses can react quickly to opportunities and manage cash flow fluctuations. Based on APS’ customer data, many SME lending requirements are lower than £1000, and are used to modernise equipment such as PCs and phones, helping to boost efficiency and support growth.

If demand continues to grow for APS’ lending facilities, the agreement with Shawbrook will be extended to continue its support. Overdrafts and lending facilities are also provided to consumers.

Richard Wagner, CEO, APS, comments, “It is no secret that small businesses in the UK are contending with a variety of headwinds that can hold back their growth. Securing timely lending, however, should not be one of those limiting factors. We see that approximately 50% of the businesses that approach us have been denied even basic banking services, like a current account, from traditional banks, because they don’t qualify for credit. With this new and expanded lending capital provided by Shawbrook, thousands of SMEs across the country will have access to services like overdrafts and loans for the first time, enabling them to play their part in the UK’s economic revival”.

Kieran McSweeney, MD at Shawbrook Bank, adds, “As a challenger bank, we’re well aware of the pent-up demand for lending in the SME space, as traditional banks ignore business needs. Last year, we were able to support new businesses by lending them over £700 million, and this new initiative with APS will enable us to further increase that reach”.